By Josh McKnight | The McKnight Team
Pennsbury School District’s projected deficit has jumped from $4.4 million to $12.5 million. Health care costs are running $5 million over budget after the district switched to self-insurance. Another $5 million in special education and transportation costs was never in the plan.
The Pennsbury budget deficit lands on property owners in Falls Township, Lower Makefield, Tullytown and Yardley. School taxes are the biggest line on most Bucks County property tax bills.
How the Deficit Grew So Fast
Two lines did most of the damage. Health care was the first. When a district self-insures, it pays claims directly instead of paying a fixed premium. A heavy claims year shows up fast. Pennsbury’s came in $5 million over. Self-insurance can save money in a good year. In a bad one, the district carries the full cost.
The second was $5 million in special education and transportation costs that were not budgeted. Those costs are hard to cut because they follow state and federal requirements. Falls Township, Lower Makefield, Tullytown and Yardley all share this one school budget, so the pressure lands across the whole district at once.
The district is moving to zero-based budgeting, which means every line starts from nothing and has to justify itself. That is a sign of a serious gap, not a routine one. Those choices get made in public meetings, and that is where the tax conversation starts.
What the Pennsbury Budget Deficit Actually Does to Property Taxes
A school budget gap has two exits. Cut spending or raise taxes. Usually both.
Set that against what the numbers show right now. The typical Yardley home value is $701,097, up 4.1% over the past year, per Zillow data through August 31, 2026. Homes go to pending in about six days.
Strong values. Rising costs. Buyers will weigh both.
Why the State Tax Cap Matters
Pennsylvania limits how much a school district can raise taxes each year. The limit is called the Act 1 index. A district can go above it only through specific exceptions or a voter referendum.
That cap protects homeowners from sudden spikes. It also means a $12.5 million gap is hard to close with taxes alone in a single year. Expect a mix of cuts, reserves and increases, possibly spread over more than one budget. Reserves can soften one year. They cannot cover a gap this size for long, and that is what you should plan around.
Here is how that reaches your bill. The school portion of a Bucks County property tax bill is the district’s millage rate times your assessed value. When the district raises millage, every owner pays more in proportion to that assessment. One increase inside the Act 1 index is usually modest on any single bill. Several in a row add up.
Both things can be true. The district is facing costs it did not plan for, and homeowners have a fair interest in where every dollar goes. Reasonable people land differently on the right balance.
This is not the first Pennsbury tax conversation of 2026, but it is the largest gap on the table. If you are thinking about listing in the next year, buyers will notice a district in the news for a deficit, and they will ask about it. If you know someone house hunting in Lower Makefield or Falls Township, send this their way.
What This Means for You
If you are selling, expect buyers and their lenders to ask about taxes. Have your current bill ready and know the district’s budget calendar. If you are buying, run your payment with a higher school tax than the current bill shows. A small increase on a $700,000 home adds up over a 30-year loan. Budget decisions made this year land on the bill you pay next year, so watch the district’s budget meetings over the coming months.
Our Yardley community guide covers Yardley, Lower Makefield and the rest of this corner of Bucks County. We can help you see the full monthly cost before you commit.
Thinking about buying or selling in Yardley? Let’s talk.
